Understanding the Lifetime Learning Tax Credit

Tax Deductions You Shouldn’t Miss

Because learning benefits everyone, even the federal government offers you incentives to pursue education throughout your lifetime. What better way to show taxpayers that learning matters than with tax credits? The Lifetime Learning Credit provides a tax break to eligible taxpayers responsible for student educational expenses. Qualifications and limitations apply.

The Lifetime Learning Credit

So, what exactly is the Lifetime Learning Credit? It’s a tax credit expressly designed to offer relief to taxpayers that are students themselves or who pay educational expenses for dependents. It is one of a few tax discounts or incentives offered to help Americans better afford post-secondary education.

Claiming the Credit on Your Taxes

It would be ideal if you could claim every single expense associated with your education, but the Lifetime Learning Tax Credit does impose a few limitations. You may calculate 20% of up to $10,000 in educational expenses or a maximum of $2,000 in credit for yourself and/or dependent student.

Eligible educational expenses include tuition and necessary school fees. Expenses must be related to post-secondary education.

Qualifications for Lifetime Learning Tax Credit

Obviously you have to actually owe taxes to qualify for the Lifetime Learning Credit. If you are claiming someone other than yourself, you must be claim them as a dependent on your taxes. Income limitations apply: if you are single your Modified Adjusted Gross Income must be less than $55,000 and if you’re married and file jointly your MAGI must not exceed $110,000 to be eligible for the tax credit.

Other qualifications include:

  • Students eligible for this credit may be undergraduate, graduate and even non-traditional students pursuing courses or certifications for professional advancement.
  • You may only claim the Lifetime Learning Credit for expenses incurred during the calendar year for which you’re filing taxes.

Documents and Filing

You’ll need a 1098-T form from your college in order to apply. Again, you are only eligible to take a credit for educational expenses incurred during the tax year. Educational expenses include tuition and fees. If you have any questions, ask your tax advisor for direction with the Lifetime Learning Tax Credit.